For decades, industries and companies around the world have known talent can serve as one of the best competitive advantages. It is also clear identifying the right talent for your business is vital because not everyone is going to be a perfect fit.
A 2014 PwC Annual CEO Survey found that 34% of U.S. CEOs are extremely concerned they will not find talent with the key skills they need to compete. The same survey found the rate of high performers leaving one organization for another is increasing, while investment in HR to stop this migration, increase diversity, and get more of the right type of talent is increasing.
Finding those people has become the biggest challenge in the sea of potential candidates. ERE Media also found that finding this talent is time-consuming and expensive. For example, a recent survey by the company found that "the speed to hire is now averaging 50 days, with recruiters reporting an even longer 57 days. The cost per hire is also increasing in several industries. The survey average was $4,200 per hire, with costs per hire increasing in the hi-tech, financial and manufacturing industries. Cost per hire did decrease in the business and professional services industry. An eye-opening 28% of respondents do not currently track cost per hire, and nearly 10% said they had no idea how much their cost per hire was."
However, these challenges may be answered in the form of people analytics, which aims to apply science to the HR function and provide the equation you need to find the perfect talent that will catapult your business above and beyond the competition. It becomes the Big Data of the recruiting and hiring world. While people analytics has actually been around for quite some time, the ability for data scientists to work with the data in different ways to uncover previously unseen patterns is new and creating the enterprises of the future.
Defining People Analytics
In a world where there is more data floating around about all of us--from our social media profiles and search engine results to results from new types of surveys, questionnaires, and games. The data from these sources can then be poured into one pot and then run through various calculations to provide a list of the traits and potential behaviors of each candidate you are considering.
The data from people analytics can also be used to determine the optimum team of individuals for a project or how to structure an organization based on certain types of talent you want to onboard. For example, the available analytics can provide a way to assess how different personalities would or wouldn't be able to collaborate on a project. This data has also been pegged as a way to determine if those already in the organization are focused on the right priorities and have a mindset that aligns with what the organization is framed around.
Other uses for people analytics includes addressing customer issues and framing new metrics for the organization to operate from. On all counts, this data can match the attributes you are looking for that drive higher performance, innovation, and collaboration to the candidates that you want to hire or those already in the organization.
Applying People Analytics to Your Organization
People analytics links the "what" and "how" together for an organization in order to better understand the behaviors and motivations that do impact performance and determine the degree of competitive advantage. Figure out what is more effective and how to be more responsive at a faster rate than the competition and you have the advantage you need in the market. To do that requires access to data the competition just doesn't have or does not realize how to use.
In 2010, an article in the Harvard Business Review focused on what talent analytics would be able to achieve for an organization. It mentioned six ways to apply analytics to an organization, including recognizing key indicators of a healthy organization, which areas needs more attention, which actions create the most impact on the business, how to gauge when to add staff or scale down, whether or not employees are likely to stay with the company or not and how the workforce may need to adapt to the changing business environment around them.
Fast-forward five years to the current workplace environment, and you will find that more organizations are starting to employ people analytics in the hopes of gaining an edge. I've even applied people analytics to hiring the best remote freelance talent too. The PwC survey noted numerous trends that are now impacting how people analytics are used within an organization:
- 86% of those surveyed said they are focused on developing or adding a people analytics function to their business over the next one to three years. There was recognition that formalizing this function would help to better understand and integrate the data into HR and talent strategies.
- Only 6 % of the organizations are currently satisfied with the quality of their people data, which illustrates the level at which technology has to go in terms of advancing the analytics available for firms.
- The on-going investment in HR includes investing in what existing people analytics tools are available and in creating their own tools.
- There will then be a greater focus on what to do with the data once it is compiled and understood in terms of the skill gaps or retention issues that will need to be addressed.
In the present business environment, there is still a way to go though in order to totally transform HR to take on this new role as data scientists, requiring a move from the softer perspective to an analytical mindset.
As a 2013 Oracle report on people analytics stated,
"There is still a significant gap in our ability as HR professionals to be data-driven and evidence-based in our decisions (for example, our HR Outlook data for winter 2012-13 indicate that while 63% of HR leaders think they draw insight from data, only about a fifth of their non-HR business counterparts share that confidence)."
Just in the last two years since that survey, strides have been made and benchmarks like Google's Analytics department have emerged to show industries around the world what is possible.